Watch Out For These Things When You Open A Bank Account For Your Kid

Having children is a wonderful experience, but it also comes with a lot of work. You may work hard to instil morals and the value of an education in your kids, but there's something else you shouldn't overlook: teaching them to manage money responsibly.

Commonly, the idea of saving money is where one should start. An excellent first step is to create a savings account for your child before he or she turns eighteen. There is a minimum balance that must be maintained in an under-18 Savings Account, just like any other Savings Account, but there are also restrictions and other features that give you, the parent or guardian, more control over how your child uses the account and how much responsibility they have for managing finances.

Key Elements

It was previously established that there is a minimum balance requirement for Savings Accounts, even for children. In addition, there is a cap on how much may be deposited into the account before the bank transfers the remainder to a Fixed Deposit account in the minor's name for a period of one year.

A debit card will be issued to the child for account access, but the maximum withdrawal amount will be lower than that of an adult's Savings Account. This safeguards against the kid becoming a spendthrift by allowing them access to finances when necessary. If you are a joint account holder with the minor, you will receive notices of all transactions made by the minor.

Besides the basics, the Savings Account offers a number of useful extras.

The Account Opening Process

The process of opening a savings account for a minor is simple and straightforward, and the minor can be involved in the process at any point:

Opening a child's savings account requires that you already have an existing savings account with the same financial institution.

You will need to fill out the account opening form, naming the minor as the primary account holder and adding yourself as a joint holder. Don't forget to upload photos beside this application. A photograph of the minor may also be required by some banks.

In order to verify the child's age, a copy of the birth certificate must be provided.

Your personal information and PAN card data is required.

You, the parent or legal guardian, may be required to provide further information on a separate form.

Proof of the minor's residence is another requirement of the bank.

After you're done, the bank will need your signature on certain paperwork.

When all of information is completed and confirmed, the bank will open the account and provide the necessary paperwork. A chequebook will also be provided to you.

Finding out what kind of Savings Account would be best for your child is the first and most crucial step in helping your child establish a lifetime of excellent savings habits. That's a great place to begin.